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Some homeowners look to delayed financing

Even as the housing market – and overall economy – slowly regains strength, homeowners are looking for different options for purchasing property. Financial situations are difficult, and individuals are trying to keep a close eye on their money and make as good of an investment as possible. As such, lenders should use mortgage loan software, to ensure that created payment plans are unique to the needs of each borrower.

In addition to mortgages, though, some individuals are turning to another choice – delayed financing. According to the Wall Street Journal, experts are saying that the practice of buyers paying cash for a home and then taking out a mortgage soon after closing has become more popular in the last 12 months.

Keith Gumbinger, a vice president at mortgage-info website HSH.com, told the news source that delayed financing is similar to a cash-out refinance. In that instance, a borrower with a mortgage also takes equity out of the home. However, cash-out refis may require a few months to execute, he said.

"Rates and fees can also be higher, partly because of the extra legwork involved transitioning from an existing loan to a new one," the article explained. "Conversely, buyers who apply for delayed financing can be considered as early as the day after they become the new homeowner, since they own the property free and clear."

The practice is more popular in affluent coastal areas, such as New York and San Francisco. Sales of multi-million dollar homes are also on the rise, according to the source, and all-cash buyers have a better chance of standing out from the competition. However, after the deal is complete, sometimes the buyers want to regain liquidity, so they get a mortgage.

Regardless of whether a buyer is using delayed financing or not, lenders would still benefit from using a real estate amortization schedule, to ensure that monthly payments are met in a timely fashion.